
SL Xpress
Full Members-
Posts
4238 -
Joined
-
Last visited
-
Days Won
1
Content Type
Profiles
Forums
Store
Downloads
Recruiting - 2020
2019-2020 Football Season
Football
Entertainment
Sports
News and Business
Cloak Room
Transfer Portal
Recruiting
Events
Everything posted by SL Xpress
-
I don't agree with your distinction, although I appreciate it. A long term investment in T-bills by an individual investor can still be exposed to liquidity risk. Especially with higher inflation. Just because it's an extremely safe investment doesn't make it risk free. And a T-bill is still the safest investment for institutional buyers, which is why so many of them invest a portion of their portfolio into them. What they don't do is invest the humongous percentage of their assets in the lowest interest bearing bond on the planet (because of its safety). I think of institutional investors like pension funds or insurance companies, and what would happen to them if they put all their assets into T-bills. It would be a monumental disaster. Imagine having annuity obligations and you've locked yourself in to long term T-bill maturity rates with the vast majority of your assets. You'd lock yourself into a ponzi scheme using new investors to pay out interest because you were never going to have enough to cover your obligations with T-bills. That isn't exactly the situation that SVB was in because the interest amount they owed to those depositors was so low. But what they had done is locked themselves into an inevitable death as interest rates continued to rise. I guess they might have been able to grow out of it if their situation had stayed hidden, but it didn't stay hidden precisely because they were trying to raise capital to deal with it. And their incompetence was so severe it appears unlikely they had the institutional wisdom to solve it even with an infusion of capital. Mostly based on everything I've read, I'm glad they failed when they did instead of being allowed to raise more money and fuck that up, too.
-
I've never seen a Chris Beard team push this much inside. It reminds me of Rick Barnes more than Beard. I'm with you. It's a welcome addition. Beard's teams used the post player to set blocks. However, the post player was never set up close enough to the basket, IMO, to be effective. It was obviously done on purpose, to allow the post player to potentially take his defender off the dribble, but for me it made the post play way less effective. Also, they were often given the ball too late in the shot clock. We're going really early inside right now, often times as the first option, which is what I've been craving. And Disu in particular is really coming into his own right now. Bishop, too. They've done a great job of using the pick and roll to get ridiculous matchups inside when the opponent switches, and wide open shots when they don't. And having so many guards who can initiate the offense is turning into the asset we all thought it would be in the preseason. I'm a tiny bit concerned now at what bringing Allen back means, but it's minor. The main thing I'm grateful for is the loss of Allen forced Terry to change the lineup in ways he seemed extremely reluctant to ever since he took over after Beard's suspension. It's really paying dividends.
-
And I would say that's a dangerous conceit, since one side of the coin always thinks the other side is stupid. Sometimes it's better to acknowledge we're all capable of being stupid, but how can we help? Rather than blaming the victim for what they should have done differently. And sometimes it's just better to let the victim suffer as a lesson to future victims. But there are all kinds of consequences for that as well.
-
I don't know the answer to that. I know the market looks for signals as to where to put its money. So, for example, for the housing crisis, a big part of it was the federal government's implied guarantee of Freddie Mac and Fannie Mae loans. These were quasi private entities with a perceived safety net. They were also very sensitive to government emphasis to increase home ownership for political reasons come hell or high water. There was no explicit guarantee of those assets, but the market behaved in a way that said they believed they were. And in 2008 the federal government showed the market it was right. This is the danger in my opinion of making the depositors whole. It sends a message to the market that the federal government will bail out any depositor no matter how risky their actions are. I'm not saying that's true. I'm simply saying that's the message that's sent. If the government lets depositors be paid pennies on the dollar - which I'm convinced is not going to happen, but let's say hypothetically speaking - the message is then be careful where you deposit your assets over $250k, and do better diligence or you could lose it all. So to me, it then becomes which side of the equation do you stand on? Is it healthier for the economy overall to send the message that depositors need to be extra careful with their money or they could lose it all? Or is it healthier for the economy to send the message that if a bank has significant safe underlying assets but they've faced a run at a time when those assets are not worth much (it could be argued long term T-bill paying somewhere around 1.5% interest were never going to be worth much ever again in the liquid market, but that's a different discussion) the depositors won't suffer long term damage? To me the most interesting part is that they had so little financial acumen at that bank that the only place they knew to invest their depositors money to earn a return was in long term T-bills. They were obviously amazing at generating huge deposits, but horrific in knowing what to do with that money. That's different from other bank failures I've read about, where a central part of the problem was making risky loans that eventually had to be written off. For SVB, the assets weren't worthless because they invested with too much risk. They were worthless (for the practical purpose of covering a bank run) because they were too safe.
-
I still wish we weren't going the "nimwit" route, but there hasn't been a single thing you've posted that I've disagreed with. It's just a different perspective. I think I get a little shocked the perspective is not more widely shared, but I find that is true on a regular basis. The mobs want to see heads roll, is what I see. I do agree with Krugman it doesn't look like another Lehman, but first, Lehman wasn't a Lehman until it happened. The feds willingly let it go under. Second, that's a pretty high bar. SVB may not cause the potential collapse of the entire global financial system. Okay. I can go with that. But there's still a lot of room for damage to be done that can be avoided if the depositors are made whole. Then enact stifling bureaucratic rules and oversight to prevent it from happening again, if it's politically important enough. It looks like a good place to start would be encouraging deposits of less than $250k for institutions below some threshold. Don't know what that should be, but less than 5% seems like a recipe for disaster at this point.
-
Well, safe is relative, but I'd say the SVB collapse shows that treasuries held directly with the federal government are not necessarily safe, either. HIgher interest rates can collapse the liquidity value of those treasuries, and inflation can make the interest worthless. At the interest rates SVB was earning, for example, it's not that much different than burying the money in a hole in the backyard. Probably the safest investments I have are property. The value can go up and down, but in the meantime they earn rent and even if the building loses its value, the land underneath is worth something. Which is part of why we all get so many calls asking if we're wanting to sell our home. There's a ton of money chasing real estate, even now with the market overall in a bit of a downturn. I'm not saying it's a good path for everyone, but it's worked for me.
-
I will say I think it's unrealistic to expect equal outcomes for richer and poorer members of society. That's not how it works. That's not about America, or late stage capitalism. That's about human hierarchies inherited from the dawn of time. What is entirely realistic is that the pendulum swings from the extreme it's at right now for the sake of societal welfare, if nothing else. It's not functional to have this much acrimony between the wealthy and the not so wealthy. Bad things happen. Really bad things. And I'm not referring to raising taxes. I guess my position is that I feel like a shareholder has a different level of due diligence in principle than a depositor, while understanding an individual buying stocks in SVB could certainly be in a different financial position than the company Roku with $487 million in deposits. I don't really have any concerns about a ripple effect regarding shareholders losing the value of their stocks, while I have a lot of concerns about depositors being seen losing the uninsured money in their accounts that were used for liquidity purposes. I feel like your objections are on moral grounds as much as anything else. In addition, you and I see different levels of danger in depositors being seen to lose their money. You feel like it's a good lesson for the economy, whereas I see it as a bad one. That's my take, in any case. I appreciate your responses nonetheless.
-
Well, it's not going to take years. I'll post an "I told you so" post when it happens. I don't think personal wealth dictates where an individual sits on the issue. You can be wealthy and still think the rich are soaking this country for all its worth and it needs to stop. Or you can be poor and think the government taxing the rich and putting too many rules out there is what is stopping this country from greatness. My problem is with the level of vitriol and righteous anger regardless of which side one is on, and the level of win at all costs that is either employed or considered as fair game. And actually none of that is nearly as concerning as the direction it's all heading in, and has been for quite some time, with no relief in sight. I'm fully convinced much more terrible things are going to happen in this country than have occurred so far. I don't believe we can be a functioning society if things go the way I see them going.
-
Again, I don't understand this. The bank closing down, the loss of liquidity for any assets in the bank for at least some period of time, the erasure of shareholder value, the likely loss of employment...none of that screams fuck around and find out to you? To me the difference isn't so much about whether there should or shouldn't be consequences. The difference is the desire for blood for anyone involved, particularly since inherently they're worth more than $250k in order to even be part of the conversation. I just remember the same mentality surrounding Lehman Brothers when they were allowed to go under, and what kind of consequences that caused. Not to mention the complete and utter lack of lessons learned because they were allowed to fail. There's a clear middle ground somewhere here, and part of that middle ground to me is that the depositors are made whole. As they will be.
-
Would taxpayers be covering all of the deposits? That's not clear to me. It seems more likely the assets are sold to another bank. I'm not sure I would classify what happened at SVB as speculation, unless we're using that word in the loosest sense. They lost their shirts overly investing in long term T-bills. That's not speculation in my mind. That's simple stupidity. Going out of business with the loss of all shareholder value seems like a pretty significant downside risk to me. But obviously I see it differently than you do.
-
I don't think that's fair or helpful. Although I do tend to side with your point of view. People are really really angry in this country. This is just another flashpoint to get even angrier. I am way more in fear of the demonization I see that occurs on each side than I am about a bank failure, as important as this may be. When Nivek talks about his righteous anger, what occurred to him and his family in 2015, and the whole 90% of the country being slave earners for the wealthiest in this country, he's not some kind of isolated example. People seem to think we're immune to really bad things happening in this country, and I think that's foolish. Our brains haven't essentially changed in over a 100,000 years. Both history and pre recorded history tells us how bad things can get. I'm not quite sure why people don't talk about it more, because I don't see anything slowing down the train wreck we're heading for eventually. In any case, to me it just seems completely and utterly obvious you want to incentivize people to keep their money in banks rather than encourage them to withdraw their deposits as soon as possible as soon as there is some kind of trouble. That's what the FDIC insurance was set up for in the first place. Not making people whole simply encourages behaviors that are not healthy for our economy. I simply don't see the depositors as the bad guys here. But that's not how everyone feels about it, no matter how obvious it seems to me. It's the Robespierrian attitudes of parties on all sides that gets me scared.
-
So I can put my torches and pitchforks away? I'm going to have them ready just in case.
-
Anyone seeing that the CEO of SVB, Greg Becker, sold $3.6m worth of stock a couple of weeks ago?
-
I don't think any depositors are going to lose money. Might take some time to get access to it, though. I don't think people will stop using banks. They'll stop using regional banks. Or at least, they'd use regional banks less for deposits over $250,000. In all honesty, they will already even if the depositors are made whole like I believe they will be. Simply not having this liquidity is going to put a scare into people to change their behavior. At least in the short run. You can see it on this thread with people asking about different banks. Fear and pain changes behavior. Oh, and no lesson is learned forever anyway. On a long enough time line, the same mistakes will be made again. I simply don't see having depositors lose their money over this being the great righteous act of justice others seem to view it as. Also, I see people blaming Thiel for this, and they're probably right. At least as a contributing factor. But if I was associated with him in some way and his warning allowed me to pull my money out in time, I'm almost certainly more grateful at the head's up than I am suspicious about his potential underhanded dealings. Unless they're able to pin some kind of fraud charge on him and make it stick, he's likely elevated his profile. That's how I would see it if I was in that world, in any case.
-
I'm sorry for your loss? I don't know anything about you or your family's situation. I don't believe shareholders should be made whole. I do believe depositors should be made whole, and will be. I don't think the failure of SVB has to be the touchstone of one of the internal wars our society is engaged in. It can be, and might be, but I don't think it has to be.
-
Well, I'm of a mind that the Dodd-Frank Act went pretty easy on financial institutions after bringing the global economy to its knees in what could have easily been much much worse than it was. So I wasn't a fan of easing anything. I feel like when really bad things happen you should expect the government to step in with a heavy hand. Whether they should or shouldn't becomes immaterial at some point. They're going to. But I still don't think having depositors lose the money they have in deposits is a good signal to send. Others are disagreeing, and that's okay. We can agree to disagree. What I will say is that whatever we think about it, it looks pretty certain to me they're going to be made whole eventually, so whatever lesson people want those depositors to learn, I don't think it will happen because they lose all their money over $250,000.
-
I didn't mean to state the 89% as fact. Just quoting the article. Thank you for the clarification. In any case, I'm with you 100% they're going to be made whole regardless of the process involved.
-
Well, that could very well happen anyway, because of the fear of losing their liquidity. It's like the police force saying, "You can beat the time, but you can't beat the ride." Not advocating for that mentality, but simply going through what they're about to go through creates its own lessons. In any case, like I've already stated, I'm convinced depositors are going to be made whole, so whatever lesson they learn, it won't be from losing their money.
-
UT's next basketball coach - discussion/debate [Sean Miller Hired]
SL Xpress replied to alphahorn's topic in Basketball
@ClubWhatever was making a joke, Js1. That one flew over your head. -
UT's next basketball coach - discussion/debate [Sean Miller Hired]
SL Xpress replied to alphahorn's topic in Basketball
Those are contradictory statements. -
UT's next basketball coach - discussion/debate [Sean Miller Hired]
SL Xpress replied to alphahorn's topic in Basketball
I just keep thinking about that Elite Eight run with BMW under Penders, and how much fun that was. I would take 4 years of mediocrity and then take another swing at a big name for that kind of season. I'll have some mixed feelings about it, but I'll take it. Shoot, the run with Augustin/James/Abrams/Johnson/Mason et al was a hell of a lot of fun. We got crushed by Memphis in Houston in a game I attended, but the season as a whole was awesome. I just don't want an early exit AND have 4 seasons of mediocrity, but I don't think that's going to be an option. Oh, and a Final Four? There's no downside with making a Final Four and then keeping Terry. Fuck it. He can have losing seasons for the next 3 to 4 seasons and it would still be worth it. I mean, I'll be glad when Texas finally parts ways with him, but I'll gratefully bid him adieu. -
UT's next basketball coach - discussion/debate [Sean Miller Hired]
SL Xpress replied to alphahorn's topic in Basketball
You and I are talking about different things. There's the buyout for the coach, which the university pays if they fire the coach before the contract is up. Then there's the buyout for the university, if the coach leaves for another job before the contract is up. The buyout for the coach has always existed. The buyout for the university started in the 90s. It has always been a much smaller number. Like I said above, the contract Major Applewhite signed with UH in 2015 is the first one I'm aware of where the amounts were identical on both sides. It's still not standard procedure to make it similar amounts for both the coach and the university. I'm saying it's surprising it's becoming as common as it is in men's basketball that the buyout numbers for the university are so often as large as they are. I do not believe football has amounts that are nearly that high across the industry, but that could very well be ignorance on my part. -
Right, but not making depositors whole incentivizes the system to go to one of the big three banks that the government has already indicated they will not allow to fail. So it incentivizes the opposite of what you think would be best for the economy. We'll see what happens. I've already read enough to feel like the depositors are going to be made whole eventually. I'm sure there will be some hue and cry about it, but to me this is the right move.
-
According to this Reuters article 89% of the $175m in deposits were uninsured. The article also makes the case this is likely similar to IndyMac in 2008 where the assets were sold to another bank after a few weeks, “This will likely be similar to the failure of IndyMac Bank in 2008," said Joseph Lynyak, a partner with Dorsey & Whitney who specializes in bank failures. "The FDIC closed that bank but had not already lined up an assuming bank. It took several weeks to find an investor.” https://www.reuters.com/markets/us/after-silicon-valley-banks-shutdown-uninsured-depositors-face-tense-wait-2023-03-10/ I realize there's a current of "fuck the rich" that goes on, and it represents a legitimate point of view in some ways with the level of wealth inequality we have. At the same time I do feel like while shareholders should lose their shirts, depositors are a different animal. I'd like to see them made whole if at all possible. There's a certain amount of liquidity necessary for a functioning economy, and that liquidity isn't necessarily provided by everyone putting their portfolio in treasury bills. In fact, ironically, it's putting their money in treasury bills that caused SVB to have their issues in the first place, because the bonds it purchased had their value plummet as interest rates rose.
-
I'm not going to say their finance industry isn't a major part of their success, because of course it is. I'd also argue that while it's assisted by its strict privacy laws, even if the laws were less robust, they'd likely be a major part of the financial system. Their expertise in banking goes beyond simply hiding money. But they're a powerhouse manufacturing country in all kinds of high end industries. Try operating a modern hospital without using Swiss equipment. I just think it's easy to talk about who "we" are going to cut out of the western financial system. That takes a huge commitment from an inordinate number of cultures who don't see things the same way. How you and I view the Swiss is going to be very different from how the Germans, French, and Italians view the Swiss, especially among Swiss populations for whom those are their native languages. But you're expressing your frustration, and on that account I can certainly agree with you. I think there are a number of people in important positions throughout Europe who are extremely frustrated with Switzerland's insistence on its neutrality preventing other countries from helping Ukraine in the way they want to. I do think there are going to be repercussions from that in terms of customer flight from depending on the Swiss defense industry. But I feel like that's the most that can be reasonably hoped for.
Football ... Basketball ... Baseball ... Other Sports ... Futbol ... 🤫995🤫 ... Gambling ... Movies & TV ... Music ... Hobbies ... Lulz ... Food & Travel ... Daily Texan ... Business and Markets ... Cloak Room ... Help ... For Sale ... Board Discussion ... Subscribe!... Donate!... Advertise... COOKIE MONSTER!